Community Benefits Agreements

Large real estate developments often require cooperation from local government, particularly when a project involves public land, zoning changes, tax incentives, infrastructure improvements, or other forms of public assistance. These negotiations can give communities and local governments an opportunity to seek public benefits alongside private development.

A community benefits agreement is a legally binding agreement in which a real estate developer commits to provide specific benefits to a community, often as part of negotiations to gain community support and facilitate local government approval or public assistance for a development project. These benefits might include affordable housing, local hiring, job training, public spaces, environmental improvements, or investments in neighborhood facilities.

The third phase of the Van Aken District, Arcadia, provides a useful example of this broader idea. As part of its agreement with the City of Shaker Heights, third-phase developer Metropolitan Holdings committed to include 25 income-restricted apartments within the approximately 141-unit mixed-use development. Those units will be reserved for households earning 80 to 100 percent of area median income and will remain income restricted for at least 20 years.

Technically, the Arcadia arrangement is a development and use agreement between the city and the developer, rather than a classic CBA negotiated directly between a developer and a coalition of community organizations. But it illustrates the same basic principle: public support for development can be used as leverage to negotiate benefits that advance broader community goals.